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					                             Before the
                 Administrative Hearing Commission
                          State of Missouri



LONNELL WALKER, SR.,                            )
                                                )
                      Petitioner,               )
                                                )
       vs.                                      )          No. 05-1585 DI
                                                )
DIRECTOR OF INSURANCE,                          )
                                                )
                      Respondent.               )


                                          DECISION

       We deny Lonnell Walker, Sr.‟s application to renew his insurance producer license

because Walker issued invalid insurance ID cards; misappropriated premium payments; signed

insurance documents without authorization; used fraudulent and dishonest practices; and

demonstrated incompetence, untrustworthiness, and financial irresponsibility.

                                          Procedure

       The Director filed a complaint on November 22, 2005, seeking this Commission‟s

determination that Walker Services, Inc., d/b/a Walker Insurance Agency‟s insurance producer

license is subject to discipline. We opened the case as Case No. 05-1716 DI.

       On September 23, 2005, the Director issued a decision denying Walker‟s application to

renew his insurance producer license. The Director mailed the decision on September 27, 2005.
Walker appealed to this Commission on October 25, 2005. We opened the case as Case No. 05-

1585 DI. We consolidated the cases for purposes of hearing, but we issue a separate decision in

each case.

        This Commission convened a hearing on February 7, 2006. Kevin Hall represented the

Director. Robert M. Susman, with Goffstein, Raskas, Pomerantz, Kraus & Sherman, LLC,

represented Walker and Walker Insurance.

        The matter became ready for our decision on August 15, 2006, when the Director filed

his reply brief.

        Having read the full record, including all the evidence, Commissioner Terry M. Jarrett

renders the decision. Section 536.080, RSMo 2000.1

                                                  Findings of Fact

        1. Walker was a licensed insurance producer at the time of the conduct described in these

findings of fact. His license expired on August 1, 2005. The Director denied his application for

renewal on September 23, 2005.

        2. Walker is the president of Walker Services, Inc., which provides insurance, financial,

mortgage, and auto brokerage services. For its insurance business, Walker Services, Inc., does

business as Walker Insurance Agency (“Walker Insurance”). Walker Insurance provides

insurance, mainly to individuals with an annual income of $25,000 or less. Ninety percent of

Walker Insurance‟s business is auto insurance, and ten percent is homeowner‟s insurance. None

of its customers procure auto liability insurance in excess of the state-required minimum.

Walker Insurance writes for nonstandard companies; i.e., it provides insurance for high-risk




        1
            Statutory references, unless otherwise noted, are to the 2005 Supplement to the Revised Statutes of
Missouri.

                                                           2
individuals with numerous violations and tickets, who could not be covered in the standard

insurance market.

       3. Walker Insurance is licensed by the Missouri Department of Insurance as a business

entity insurance producer.

                                          Edna Jones

       4. On June 26, 2003, Edna Jones met with Walker to procure insurance on a 1991 Honda

Civic that she was purchasing. Jones paid a premium of $600 plus a broker fee of $95. Jones

signed a broker agreement2 with Walker, stating:

                          MISSOURI BROKERS SERVICE CONTRACT

                    1. THE UNDERSIGNED INSURED HEREBY ENGAGES THE
                       SERVICES OF MR. LONNELL WALKER, A LICENSED
                       MISSOURI INSURANCE BROKER, LICENSE # ***-***-
                       ***, AS HIS/HER AGENT FOR THE PURPOSE OF
                       SECURING NEGOTIATING AND PROCURING THE
                       PLACEMENT OF THE FOLLOWING DESCRIBED
                       INSURANCE COVERAGES AND TO ASSIST THE
                       UNDERSIGNED IN THE PREPARTATION [sic] OF ANY
                       AND ALL APPLICATIONS, UNDERWRITING DATA,
                       AND OTHER INFORMATION REQUIRED BY AN
                       INSURER FOR THE PURPOSE OF ISSUING AN
                       INSURANCE POLICY WITHIN THIS STATE. THE
                       INSURANCE COVERAGE REQUESTED IS (HERE
                       DESCRIBE IN DETAIL THE COVERAGE TO BE
                       EFFECTED)

                    2. THE UNDERSIGNED INSURED AUTHORIZES THE
                       BROKER TO COMMIT TO A MAXIMUM PREMIUM OF
                       NOT MORE THAN $1,900 PER YEAR FOR THE ABOVED-
                       STATED [sic] COVERAGE. THE UNDERSIGNED
                       INSURED AGREES TO PAY AS COMPENSATION TO
                       THE BROKER, ABOVE AND IN ADDITION TO THE
                       COMMISSION RECEIVED FROM THE INSURER FOR
                       THE VARIOUS SERVICES OF THE BROKER A FEE OF
                       NOT MORE THAN $284.00



       2
           Ex. D.

                                               3
                 3. A BRIEF DESRIPTION [sic] OF THOSE BROKERS
                    SERVICES PERFORMED AND NOT DESCRIBED IN
                    PARAGRAPH 1 ABOVE IS FOR THE ADMINISTRATIVE
                    OPERATIONS FOR SERVICING THE POLICY AND ANY
                    CLAIMS AGAINST THE INSURED. THE FEE IS NON-
                    REFUNDABLE

                 THIS AGREEMENT IS IN FURTHERANCE OF SECTION
                 375.116, RSMo (1986) AND MISSOURI DEPARTMENT OF
                 INSURANCE REGULATION 20 CSR 700 1 100.

The second page of the contract states:

                 THE BROKER SERVICE CONTRACT FEE IS DETERMINED
                 BY THE YEARLY PREMIUM WHICH IS 15% OF THE
                 POILCY [sic] PREMIUM OR A $95.00 FLAT FEE,
                 WHICHEVER IS GREATER.

                 CONTRACT AMENDMENT TO PARAGRAPH (3) THESE
                 SERVICES MAY ENCURE [sic] AN AGENCY SERVICE
                 CHARGE ON CERTAIN POLLICY [sic] ENDORSEMENTS.

                 ALSO AS YOUR AGENT AND BROKER, THERE ARE TIMES
                 WHEN I OR THE AGENCY WILL NEED TO ACT AS YOUR
                 ATTORNEY-IN-FACT AS RELATED TO THE BUSINESS OF
                 INSURANCE.

                 CONTRACT TERMS ARE FROM YEAR TO YEAR OR WHEN
                 THE POLICY TERMINATES FOR WHAT EVER [sic]
                 REASON. CONTRACT IS RENEWABLE AT A CHARGE
                 THAT WILL BE ASSESSED AT THAT TIME.

        5. Jones received an insurance card from Walker with Omni Insurance Company

(“Omni”) as the insurer, stating that the policy number was “pending,” the effective date was

June 26, 2003, and the expiration date was June 26, 2004. Omni is part of Hartford Insurance

Company.3

        6. Omni does not authorize the issuance of binders and thus does not authorize the

issuance of temporary ID cards. Omni does not consider a “pending” ID card to be valid.


        3
          For purposes of this decision, we consider Omni and Hartford to be interchangeable. The Hartford name
and insignia appear on some documents, and Omni‟s name appears on others. For purposes of these findings, we
use the name that is on the referenced document.

                                                       4
Walker did not have the authority to issue an ID card for Omni until there was a written and

signed contract, and he knew that he did not have such authority.

       7. Walker input his business address as Jones‟ address in issuing the policy. Therefore,

Jones did not receive correspondence from Omni.

       8. On June 27, 2003, Walker paid $290.80 to Omni and kept the remainder of the

premium payment in the agency‟s account.

       9. Omni issued a declarations page on June 27, 2003, showing a policy period from

June 26, 2003, through December 26, 2003, with an attached statement showing $290.80 “paid

to date.”

       10. Omni reviewed the policy and determined that a traffic control device violation was

on the quote, but no points were added into the quote to increase the premium. On July 7, 2003,

Omni added one point to the policy and sent a corrected declarations page and payment schedule

reflecting $18.04 “due now.” Walker paid the $18.04 on July 11, 2003.

       11. Two weeks after Jones purchased the Honda, it broke down. At that time, Jones had

not received a permanent insurance card for the Honda. Jones called Walker and asked him why

she had not received a permanent insurance card and whether she could transfer the insurance if

she bought a different vehicle.

       12. On or about July 15, 2003, Jones received two copies of a permanent insurance card

from Walker, not from Omni. The card was only for a term of six months, and no policy was

attached even though there was a staple in the page. Jones called Walker to ask why the

permanent insurance card was only valid for six months. Walker stated that it was not unusual

for insurance companies to write policies for only six months at a time and that the policy would

automatically renew in December 2003.



                                                5
       13. Jones purchased a 2003 Suzuki Aerio and received it on July 21, 2003.

       14. On July 25, 2003, Jones returned to Walker‟s office and asked to have the coverage

changed to a 2003 Suzuki Aerio. Walker stated that the coverage would be an additional $753.

Jones stated that she wanted coverage for one year, and Walker assured her that this would not

be a problem. Jones wrote a check for $753. Walker gave her a temporary insurance card and a

receipt for $753 with $0 balance due. The $753 was in the agency‟s account, but was not

uploaded to Omni. At that point, Jones had paid a total of $1,448 ($695 + $753).

       15. On July 31, 2003, Omni sent a notice showing payment of $308.84 to date and

$535.80 “due now.” The declarations page from Omni for coverage for the Suzuki shows a

policy period from June 26, 2003, through December 26, 2003, and a premium of $945.53.

Jones did not receive the notice because it was sent to Walker‟s office.

       16. Walker received a notice of cancellation from Omni stating that the policy would not

be cancelled if Omni received the amount past due by August 31, 2003. (Ex. 2.5 at 40.) Walker

paid the $535.80 to Hartford on September 2, 2003.

       17. Jones called Walker‟s office during the first week of August 2003 to find out why

she still had not received a policy. By mid-August, Walker had not returned her call. She called

Omni and was told that a policy had been sent. However, she had not received it.

       18. On September 3, 2003, Walker signed Jones‟ signature on a “Statement of No-Loss,”

stating: “I certify there have been no losses or accidents involving any vehicle or driver listed on

this policy from 12:01 a.m. 9-2-03 to 09-03-2003 9:55 AM.” (Tr. at 120-21.)

       19. During the first week of September, Jones again called Walker‟s office and

complained that she had not received her policy. Walker stated that the policy had been sent to

his office by mistake and that he would send it to her. When she received the policy, Jones

noticed that it was backdated to one month before she received the car.

                                                 6
       20. On December 8, 2003, Hartford sent Jones a renewal notice for a policy period from

December 26, 2003, through June 26, 2004, with a premium of $945.53. Hartford divided the

premium into monthly payments and billed $157 for the first payment, “due now.” Jones did not

receive the notice because it was sent to Walker‟s office address.

       21. On December 23, 2003, Hartford issued a cancellation notice, effective January 4,

2004, stating that her policy would be cancelled due to nonpayment of premium unless payment

was received by January 2, 2004. Hartford included a “past due payment notice” requesting

payment of $157 by January 2, 2004.

       22. Near the end of December, Jones had not received her insurance card for the next

six-month period. She called Walker, who told her that her policy had been renewed and that

new insurance cards would be coming from the insurance company.

       23. On December 29, 2003, Jones still had not received new insurance cards, so she

called Walker‟s office. Walker returned the call on December 30, 2003, after 5:00 p.m., and told

her that it would cost $575 for the next six months of coverage. Jones questioned why she

should pay $575 in addition to the $1,448 that she had already paid for one year of coverage.

She asked Walker to cancel her policy and return any unused portions of her premium. Walker

replied that he had already renewed the policy, and that the first month of coverage for the

Honda consumed most of the $695 that she originally paid.

       24. Jones called Walker again on January 6, 2004, to see if he had returned her unused

premium and if he had reviewed her account. Walker informed her that it would take about 30

days to return her unused premium. When she asked why, he replied, “That‟s the way it is.”

       25. On January 8, 2004, Jones filed a complaint with the Director claiming a refund as

follows:



                                                 7
                                           Premium             $945.53
                                           Broker Fee            + $95
                                                             $1,040.53
                                           Payments           – $1,448
                                           Refund              $407.47

       26. On February 2, 2004, Walker refunded $218.47 to Jones. Walker calculated the

refund as follows:

                                           Payment                $695
                                           Payment              + $753
                                                                $1,448
                                           Premium           – $945.53
                                                               $502.47
                                           Broker Fee            – 284
                                                               $218.47

       27. Jones sued Walker in small claims court, received a judgment against him, and then

obtained a garnishment of his account. On June 22, 2005, Jones received an additional refund of

$406.31 from Walker through the garnishment.4

                                                Tabitha Carter

       28. On October 1, 2003, Tabitha Carter paid Walker Insurance Agency $1,167 for six

months of auto insurance coverage on a Lexus and an Acura with Deerbrook Insurance. Walker

first quoted a premium of $924. Walker later learned that Carter‟s husband, Leslie Carter, had a

suspended driver‟s license. Even though Leslie Carter was excluded from coverage, the

premium was increased. Her payment of $1,167 was deposited in the agency‟s account, and

Walker set up the policy for automatic drafted payments of $262 per month to Deerbrook from

the agency‟s account, with a policy period from October 13, 2003, through April 13, 2004.

Walker gave his office address as the address of the insured. Carter was unaware that Walker set

up the policy for automatic drafted payments, as she had paid in full for six months of coverage.

It is against Deerbrook‟s policy for payments to be drafted from an agent‟s financial account.

       4
           The record does not show how this amount was calculated.

                                                        8
       29. On October 2-3, 2003, Carter and Walker signed a Missouri Broker Service Contract.

The wording of the contract is identical to the contract that Edna Jones signed, except that the

maximum premium was not to be more than $2,200 per year and the broker commission was not

to be more than $330.

       30. The premium was increased by an additional $207.40 on November 3, 2003, due to

insufficient proof of prior insurance. The premium was increased by an additional $104.80 on

January 26, 2004, because an additional operator was added. Due to the increases, the total

premium for October 13, 2003, through April 13, 2004, was $1,236.20, which was more than

Carter had paid.

       31. On March 10, 2004, Deerbrook drafted the renewal payment of $324.05 from the

agency‟s account.

       32. Carter‟s coverage on the Lexus and Acura was in effect until March 18, 2004, when

Walker terminated the policy without Carter‟s consent.

       33. On March 19, 2004, Deerbrook issued a refund check to Carter for $218, but sent it

to Walker‟s office address because that was the address that the company had for Carter. Walker

signed Carter‟s name on the back of the check to endorse it because he believed the power of

attorney in his broker service contract authorized him to do so. Walker deposited it because

Walker Insurance had paid the $324.05 renewal payment, and the refund check was not enough

to reimburse it.

                                        Veronica Osborne

       34. Walker issued an insurance identification card to Veronica Osborne for Omni

Insurance Company with policy number “pending,” an effective date of November 21, 2003, and

an expiration date of December 21, 2003. Omni does not authorize the issuance of binders and

thus does not authorize the issuance of temporary ID cards. Walker did not have the authority to

                                                 9
issue an ID card for Omni until there was a written and signed contract, and Walker knew that he

did not have such authority. Omni never issued a policy to Osborne. Walker switched to

Deerbrook because it was cheaper.

       35. On December 17, 2003, Walker signed Osborne‟s signature on a “Named Driver

Exclusion Endorsement,” which listed Randy Osborne, spouse, as a person authorized to be

excluded from her automobile insurance policy. Veronica Osborne did not authorize Walker to

sign her name, and there was no one in her household named Randy Osborne.

                                       La‟Kendra Grimes

       36. On June 11, 2004, La‟Kendra Grimes paid Walker a premium of $275 for auto

insurance coverage with American International Group, Inc. (“AIG”). Walker issued an

insurance identification card to Grimes for AIG with policy number “pending,” an effective date

of June 11, 2004, and an expiration date of July 11, 2004. Walker issued a receipt stating that

the balance of $275 was due on or before June 25, 2004. Grimes did not pay the balance due by

June 25, 2004.

       37. AIG‟s guidelines required Walker to upload the application to AIG immediately

upon receipt of the application and to send all funds received from the insured to AIG

immediately via electronic funds transfer at the time of the policy upload. AIG‟s software

provides a temporary ID card for the insured‟s use at the time of the policy upload. AIG never

received an application or payment or issued a policy for Grimes. AIG did not give Walker the

authority to write an ID card for Grimes, and Walker knew that he had no such authority. The

ID card written by Walker was not recognized by AIG as identifying Grimes as a client of AIG.

       38. On July 14, 2004, Grimes was in an accident with the vehicle. She went to Walker‟s

office and wanted to pay the balance due. Walker told her that she was not covered. She paid

Walker a premium of $320, but Walker informed her that due to the accident, another $153


                                                10
would be due. Walker issued a receipt for payment of $320, which stated that the balance of $153

was due on or before July 28, 2004. Walker also informed her that he needed to see the vehicle to

take pictures of the damage before placing coverage on the vehicle. She did not have the vehicle

with her at the time and never returned with the vehicle so that Walker could examine it.

                                          Dion Beckham

       39. Dion Beckham signed a personal auto application on June 23, 2004. A driver‟s

license number, which was the same as the social security number, appeared on the application.

Walker issued an insurance identification card to Beckham for Omni Insurance Company with

policy number “pending,” an effective date of June 23, 2004, and an expiration date of July 23,

2004. Walker collected a premium from Beckham on June 23. However, Beckham was never

insured with Omni, as Walker uploaded an application to Leader Insurance (“Leader”) on July 13,

2004, because it was cheaper than Omni. Leader‟s underwriting department processed the

uploaded application, but issued a cancellation notice on July 21, 2004, effective August 22, 2004,

for failure to provide a valid driver‟s license number for Beckham.

       40. On August 2, 2004, Beckham called Leader. The customer service representative

explained that Beckham needed to supply a correct driver‟s license number. Beckham provided

a corrected driver‟s license number, and the customer service representative reinstated the policy.

       41. On September 21, 2004, Leader notified Beckham that his insurance would be

cancelled at 12:01 a.m. on October 4, 2004, for failure to pay premium due in the amount of

$138.06. The notice stated that this amount must be received prior to the cancellation date in

order for the policy to be considered for reinstatement.

       42. Walker wrote a check to Infinity Insurance for $139, dated October 2, 2004. Leader

is part of Infinity. The envelope was postmarked October 4, 2004. Infinity received the check

on October 7, 2004.


                                                11
       43. On October 27, 2004, Leader issued a notice of cancellation to Beckham, notifying

him that his insurance was cancelled on October 4, 2004.

                                                Antoinette Jones

       44. Antoinette Jones went to Walker on July 27, 2004, to obtain homeowners and auto

insurance. Jones did not have enough money to pay for both, so she made a payment of $150

toward the auto insurance and $195 toward the homeowners insurance.5 Jones intended to buy

property at 7901 Alert in St. Louis. She was expecting a refund check from Fair Plan insurance

company, and the refund was to be applied to the balance due on the insurance from Walker.

Walker gave her a receipt for the premium of $150 paid on the auto insurance. “Company not

yet selected” was typed in the blank on the receipt for “name of insurance company.”

       45. Walker issued an auto insurance identification card to Jones for Omni Insurance

Company with policy number “pending,” an effective date of July 27, 2004, and an expiration

date of August 27, 2004. Walker issued the card “as a reminder for her to come back and . . .

complete the down payment.” (Ex. 2.5 at 119.) Omni does not authorize the issuance of binders

and thus does not authorize the issuance of temporary ID cards. Walker did not have the

authority to issue an ID card for Jones until there was a written and signed contract, and Walker

knew that he had no such authority. Omni does not consider a “pending” ID card to be valid.

(Ex. 23.)

       46. Jones never closed on the property at 7901 Alert.

       47. Omni has no record of coverage for Jones. Walker failed to remit premium

payments to Omni.

       48. Jones asked Walker for a refund, but he refused to give her money back.



       5
           The record is inconsistent as to which was for homeowners and which was for auto.

                                                        12
        49. Jones filed a complaint with the Missouri Department of Insurance, stating: “Didn‟t

return money for property I didn‟t have. Property name 7901 Alert.”

        50. The refund check from Fair Plan was sent to 7901 Alert, so Jones did not receive it.

After Jones filed her complaint against Walker with the Missouri Department of Insurance,

which conducted an investigation, Fair Plan was to reissue the check.

                                      Carlos Lopez Johnson

        51. On May 31, 2005, Carlos Lopez Johnson went to Walker‟s office to obtain

automobile insurance. Walker‟s quote was $296. Walker told Johnson that he could pay $146

down and pay the remainder within 10 days, which Johnson did. Walker issued an insurance ID

card effective May 31, 2005, and expiring June 31, 2005, with policy number “pending,” and

JUA as the insurance company. However, Walker never obtained insurance for Johnson from

JUA. Walker knew that this “pending” ID card was not a valid ID card.

        52. On June 21, 2005, Walker uploaded an application for insurance for Johnson with

GMAC Insurance. A payment of $177.02 was submitted with the uploaded application.

        53. After receiving nothing with a policy number on it, Johnson contacted Walker, who

stated that Johnson‟s license was suspended and that GMAC was the insurance company.

Johnson was not aware that his license was suspended. Johnson cancelled the policy on June 29,

2005.

                                      Conclusions of Law

        We have jurisdiction to hear this case. Section 621.045. The applicant has the burden to

show that he or she is entitled to licensure. Section 621.120, RSMo 2000. We exercise the same

authority that has been granted to the Director. J.C. Nichols Co. v. Director of Revenue, 796

S.W.2d 16, 20 (Mo. banc 1990). Therefore, we simply decide the application de novo. State Bd.

of Regis’n for the Healing Arts v. Finch, 514 S.W.2d 608, 614 (Mo. App., K.C.D. 1974). This

                                                13
Commission must judge the credibility of witnesses, and we have the discretion to believe all,

part, or none of the testimony of any witness. Harrington v. Smarr, 844 S.W.2d 16, 19

(Mo. App., W.D. 1993).

                                                 Evidence

        At the hearing, Walker raised hearsay objections to the Director‟s exhibits. All of the

exhibits that were offered were admitted into evidence. At the conclusion of the hearing, Walker

agreed to waive his hearsay objections except as to Ex. 5, p. 1; Ex. 9; Ex. 10; Ex. 12; Ex. 13; Ex.

14; Ex. 15, pp. 1-3; Ex. 16; Ex. 17, pp. 1-12 and 22; Ex. 18, p. 1; Ex. 20, pp. 1-3; Ex. 21; Ex. 23;

Ex. 25, pp. 1-2; and Ex. 26, pp. 1-4. These exhibits are the consumer complaints that Walker‟s

customers filed with the Director, and correspondence from the insurance companies to the

Director‟s investigator. The Director agreed that Ex. 15, p.5; Ex. 17, p. 23; the handwritten

comment on Ex. 18, p. 3; and Ex. 26, p. 14 are not admitted into evidence. Though this

Commission ruled that the Director‟s proffered exhibits were admissible as business records, we

agreed that the parties could include arguments in their post-hearing briefs as to the extent to

which we may consider hearsay statements made in those exhibits. (Tr. at 206-07.)

        Walker cites numerous cases applying the Uniform Business Records as Evidence Law,

§§ 490.660 through 490.690, and argues that hearsay statements contained within a business

record are not admissible.6 However, in administrative proceedings such as this one, §§ 490.660

through 490.690 do not apply.7 Instead, § 536.070(10), RSMo 2000, governs.8




        6
           Fehr v. R&S Express, 924 S.W.2d 331, 334 (Mo. App., E.D. 1996) (overruled on other grounds),
Hampton v. Big Boy Steel Erection, 121 SW.3d 220 (Mo. banc 2003); Stewart v. Sioux City & New Orleans Barge
Lines, 431 S.W.2d 205 (Mo. 1968); Killian Const. Co. v. Tri-City Const. Co., 693 S.W.2d 819, 835 (Mo. App.,
W.D. 1985); State v. Thrasher, 654 S.W.2d 142, 144 (Mo. App., E.D. 1983); State v. Kreutzer, 928 S.W.2d 854,
868 (Mo. banc 1996); Nelson v. Holley, 623 S.W.2d 604, 607 (Mo. App., W.D. 1981).
         7
           State ex rel. Sure-Way Transp. v. Div. of Transp., 836 S.W.2d 23, 26-27 (Mo. App., W.D. 1992).
         8
           Id.

                                                    14
          Section 536.070(10), RSMo 2000, provides:

                Any writing or record, whether in the form of an entry in a book or
                otherwise, made as a memorandum or record of an act, transaction,
                occurrence or event, shall be admissible as evidence of the act,
                transaction, occurrence or event, if it shall appear that it was made
                in the regular course of any business, and that it was the regular
                course of such business to make such memorandum or record at
                the time of such act, transaction, occurrence, or event or within a
                reasonable time thereafter. All other circumstances of the making
                of such writing or record, including lack of personal knowledge by
                the entrant or maker, may be shown to affect the weight of such
                evidence, but such showing shall not affect its admissibility. The
                term “business” shall include business, profession, occupation and
                calling of every kind.

Walker argues that there is inadequate foundation for these documents and that they are not

admissible in evidence merely because they are found in the Director‟s file. The Commission

already ruled that the documents are admissible as business records of the Director. In

Williamsburg Truck Plaza v. Muri, 882 S.W.2d 346, 349 (Mo. App., W.D. 1994), the court

stated:

                The administrative law judge has discretion to determine from the
                totality of the circumstances whether the document meets the
                criteria of section 536.070(10), and the preparer or custodian of the
                document need not be present to establish a foundation.

In State ex rel. Sure-Way Transp. v. Div. of Transp., 836 S.W.2d 23 (Mo. App., W.D. 1992),

the court found that revenue reports submitted by Sure-Way were admissible despite the fact that

no employee of Sure-Way testified as to their identity and authenticity. The Division argued that

§§ 490.660-490.690 require such testimony, but the court found that this was not required under

§ 536.070(10), RSMo 2000. Id. at 26-27. The court stated: “The investigator‟s lack of personal

knowledge of the documents affected the weight given them by the administrative law judge, not

their admissibility.” Id. at 27.




                                                 15
        This Commission has applied § 536.070(10), RSMo 2000, in numerous cases and has

concluded that all circumstances surrounding the making of writings, including any lack of

personal knowledge on the part of the authors thereof, may go to the weight, but not the

admissibility, of the evidence.9 In Associated Wholesale Grocers v. Moncrief, 970 S.W.2d 425,

428 (Mo. App., S.D. 1998), the court stated that “an objection to a business record on the ground

that it is hearsay is unavailing if the record meets the requirement of the act for admission in

evidence.”

        The complaints and letters in question were obtained by the Missouri Department of

Insurance. It is the business of the Department to receive complaints and investigate them.

These documents are admissible under § 536.070(10), RSMo 2000. To the extent that they

contain hearsay, this is not grounds for exclusion of the documents, but may go to the weight of

the evidence. As the Director notes, § 374.210.2, RSMo 2000, provides criminal penalties for

giving false information to the Director in the course of an investigation. Therefore, we would

expect that the insurance companies would give reliable information in their correspondence to

the investigator. The Director has provided sufficient indicia of reliability for this evidence.

        Walker also argues that admission of hearsay statements would violate his due process

right to cross-examine his accuser. Walker cites In re Interest of G.C., 50 S.W.3d 408, 420 n.7

(Mo. App., E.D. 2001) (Teitelman, J., concurring). This was a concurring opinion of one judge,

not the majority opinion of the court. In that case, the court reversed the juvenile court‟s

judgment placing an infant in the legal custody of the Division of Family Services. The majority

found insufficient evidence of neglect. Only the concurring judge found that the mother had a

due process right to cross-examine her accusers. In the context of attorney disciplinary


        9
         E.g., State Bd. of Regis’n for the Healing Arts v. McKenzie, No. 02-0530 HA (Nov. 24, 2003); Nedrow
v. Missouri Bd. of Pharmacy, No. 02-0106 (Dec. 11, 2002); State Bd. of Cosmetology v. Eden, No. 01-0146 CS
(Aug. 17, 2001).

                                                     16
proceedings, the Missouri Supreme Court has stated that disciplinary proceedings are not

criminal trials in which a defendant has a constitutional right to confront witnesses. In re

Cupples, 952 S.W.2d 226, 233 (Mo. banc 1997). We note that Walker testified in this

proceeding and had the opportunity to refute any statements made in any exhibits that the

Director offered. Walker was afforded ample due process protection.

                                        Grounds for Denial

       The Director‟s decision cites numerous grounds to deny Walker‟s application for license

renewal. However, when an applicant appeals from an agency‟s denial of an application for

licensure, the agency‟s answer to the complaint sets forth the bases for denial. Ballew v.

Ainsworth, 670 S.W.2d 94, 103 (Mo. App., E.D. 1984). We determine whether there is cause to

deny the application based on those grounds. Id. The Director‟s answer raises the bases for

denial as a “counterclaim,” and copies the same facts and bases as the Director‟s complaint in the

disciplinary proceeding against Walker Insurance, Case No. 05-1716 DI.

       The Director argues that there is cause to deny Walker‟s application under § 375.141.1,

which states:

                       The director may suspend, revoke, refuse to issue or refuse
                to renew an insurance producer license for any one or more of the
                following causes:

                                              * * *

                        (2) Violating any insurance laws, or violating any
                regulation, subpoena or order of the director or of another
                insurance commissioner in any other state;

                                              * * *

                       (4) Improperly withholding, misappropriating or converting
                any moneys or properties received in the course of doing insurance
                business;

                                              * * *

                                                 17
                      (8) Using fraudulent, coercive, or dishonest practices, or
               demonstrating incompetence, untrustworthiness or financial
               irresponsibility in the conduct of business in this state or
               elsewhere;

                                             * * *

                      (10) Signing the name of another to an application for
               insurance or to any document related to an insurance transaction
               without authorization[.]

                        Count I: Violating Insurance Laws or Regulations

                    A. Violating an Insurance Law: Invalid Insurance ID Cards

       The Director asserts that Walker issued invalid insurance ID cards to Edna Jones,

Osborne, Grimes, Beckham, Antoinette Jones, and Johnson. Section 303.179, RSMo 2000,

provides in part:

               No person knowingly shall make, sell or otherwise make available
               an invalid or counterfeit insurance card. Any person who violates
               this section is guilty of a class A misdemeanor.

       Walker issued an insurance card to Edna Jones for the Honda, effective June 26, 2003,

with the policy number “pending.” Omni does not authorize the issuance of binders and thus

does not authorize the issuance of temporary ID cards. Walker did not have the authority to

issue an ID card for Omni until there was a written and signed contract, and he knew that he had

no such authority. Omni does not consider a “pending” ID card to be valid. In addition, the ID

card had an invalid policy term of one year instead of six months. The policy was a six-month

policy. The ID card was invalid.

       Similarly, Walker issued an ID card to Osborne with Omni as the insurer and the policy

number “pending.” Walker did not have the authority to issue an ID card for Omni until there

was a written and signed contract, and he knew that he had no such authority. Further, Walker




                                                18
switched to Deerbrook because it was cheaper, so Osborne was never even insured with Omni.

The ID card was invalid.

       In the Grimes transaction, Walker issued an ID card for AIG with policy number

“pending.” AIG‟s software provides a temporary ID card for the insured‟s use at the time of the

policy upload. AIG‟s guidelines required Walker to upload the application to AIG immediately

upon receipt of the application, but Walker did not do so. AIG never received an application or

payment or issued a policy for Grimes. AIG did not give Walker the authority to issue an ID

card for Grimes, and Walker knew that he had no such authority. Therefore, the ID card was

invalid.

       The Beckham transaction was similar to Osborne‟s. Walker issued an ID card for Omni

with policy number “pending.” As we have already stated, Omni does not authorize the issuance

of temporary ID cards. Walker did not have the authority to issue an ID card for Omni until

there was a written and signed contract, and he knew that he had no such authority. In addition,

Walker switched to Leader Insurance because it was cheaper than Omni. Beckham was never

even insured with Omni. The ID card was invalid.

       As to Antoinette Jones, Walker issued an ID card with policy number “pending,”

knowing that there was not even a policy in effect and that she had not paid the entire premium.

He stated that he did so “as a reminder for her to come back and . . . complete the down

payment.” Further, this ID card was for Omni, which does not consider a “pending” ID card to

be valid, and Walker knew that the ID card was not valid. The card was invalid.

       Walker issued an insurance ID card to Johnson for coverage with JUA with policy

number “pending,” but never obtained insurance for Johnson with JUA. Walker uploaded an

application for coverage with GMAC. The insurance ID card, showing coverage with JUA, was

invalid, and Walker knew that it was invalid.

                                                19
       Walker violated § 303.179, RSMo 2000, by issuing invalid insurance ID cards to Edna

Jones, Osborne, Grimes, Beckham, Antoinette Jones, and Johnson.

               B. Violating a Regulation: Failure to Secure Insurance Coverage

       Regulation 20 CSR 700-1.140 provides:

               (2) Document and Premium Handling Standards. When dealing
               with any personal insurance policy, every insurance producer shall
               comply with the following standards of promptness regarding
               securing and amending coverage, providing written evidence of
               insurance transactions and handling premiums, except to the extent
               these actions are the responsibility of the insurer. Where it is the
               insurer‟s responsibility to take these actions, this responsibility
               shall be delineated in a written document, a copy of which shall be
               retained by the licensee and available for examination by the
               department.

                       (A) Every insurance producer shall handle every
               application for new coverage under a personal insurance policy
               and every request for amendments to an existing policy in a
               manner which will secure the new or amended coverage as
               soon as is reasonably possible, unless a longer time is permitted
               under a written agreement between the licensee and the insured or
               prospective insured. If within thirty (30) days of the original
               application for insurance the licensee has not yet secured an
               insurer willing to provide coverage, the licensee immediately
               shall inform the prospective insured of this fact in writing.

(Emphasis added). The Director asserts that Walker violated this regulation in the Grimes,

Beckham, and Antoinette Jones transactions by failing to secure new or amended coverage after

they had applied for insurance coverage and by failing to notify them within 30 days after their

original applications for insurance that he had not secured coverage.

       Walker did not handle the Grimes application in a manner that would secure coverage.

Grimes paid a premium of $275 on June 11, 2004, and was to pay the remaining $275 by June 25,

2004. She did not pay the remainder by June 25, 2004. However, in the meantime, Walker did

not upload the application to AIG, even though he had given Grimes an insurance ID card stating

that the coverage was effective June 11, 2004. AIG‟s guidelines required Walker to upload the

                                                20
application to AIG and to send all funds received from the insured to AIG immediately upon

receipt of the application, but Walker did not do so. AIG never received an application or

payment for Grimes. Walker failed to secure coverage for Grimes. Further, there is no evidence

that Walker notified Grimes that he failed to secure coverage until she had an accident over a

month later. Walker violated the regulation by failing to secure coverage for Grimes and failing

to notify her that she did not have coverage. We find cause to deny Walker‟s application under

§ 375.141.1(2) for Walker‟s violation of Regulation 20 CSR 700-1.140(2)(A).

       Beckham paid a premium on June 23, 2004, but he received a cancellation notice, issued

on July 21, 2004, for failure to provide a valid driver‟s license number. A driver‟s license

number appears on the application. Walker cannot be faulted for Beckham‟s failure to provide a

valid driver‟s license number. Beckham‟s policy was reinstated when he provided a valid

number. The evidence is insufficient to show that Walker failed to secure coverage for

Beckham.

       There is also evidence that Beckham‟s policy was then cancelled on October 4, 2004, for

untimely payment. Walker argues that Beckham was normally billed directly by the insurance

company, but that he brought a payment of $139 cash into Walker‟s office on October 2, 2004.

(Tr. at 193, 195; Ex. 2.5 at 111-12.) Walker argues that he did not know that the policy would be

in cancellation status if not paid by October 4, 2004. (Tr. at 194-96.) Regardless of whether the

nonpayment was Walker‟s fault, Regulation 20 CSR 700-1.140(2)(A) requires that a producer

handle every application for new coverage and request for amendments to coverage in a manner

that will secure the new or amended coverage as soon as is reasonably possible. The evidence

does not show that Walker violated the regulation by failing to secure new or amended coverage

for Beckham.



                                                21
       Antoinette Jones never closed on her property transaction, did not contact Walker until

she wanted a refund, and was unable to pay the full amount of her premiums. The regulation

only requires the producer to secure coverage “as soon as is reasonably possible.” The evidence

is insufficient to show that Walker violated the regulation by failing to handle Antoinette Jones‟

application in a manner that would secure coverage as soon as is reasonably possible.

       The regulation also requires the licensee to immediately inform the prospective insured in

writing if he has not, within 30 days, secured an insurer willing to provide coverage. Antoinette

Jones, however, never paid the full amount of her premiums. We do not construe the regulation

as imposing a notification requirement when the prospective insured fails to pay the full amount

of the premium, and thus would already be on notice that coverage will not be provided. Walker

did not violate the regulation in the Antoinette Jones transaction.

                     C. Violating a Regulation: Failure to Remit Premiums

       The Director argues that Walker violated 20 CSR 700-1.140(2)(D), which states:

                       Insurance producers shall remit all premium payments
               associated with a personal insurance policy to those persons
               entitled to them as soon as is reasonably possible after their
               receipt by the licensee, but in no event later than thirty (30)
               days after the date of receipt, provided, however, that premiums
               may be remitted at a later point in time if the licensee is so
               authorized under a written agreement between the licensee and the
               person legally entitled to the premiums. In no event, however,
               shall a licensee retain premium payments if to do so will result
               in the failure to obtain or continue coverage on behalf of an
               insured or prospective insured.

(Emphasis added). The Director argues that Walker failed to remit the premium payments of

Edna Jones, Carter, Grimes, and Antoinette Jones within 30 days of receipt, and that this resulted

in failure to obtain or continue coverage on behalf of these individuals.




                                                 22
                                          1. Edna Jones

       Edna Jones paid a premium of $600 on June 26, 2003. Walker paid $290.80 to Omni on

June 27, 2003, and kept the remainder in the agency‟s account. Walker argued that he did not

forward the remainder of Edna Jones‟ premium to Omni because he knew that she was getting a

new car. However, Jones‟ car did not break down until two weeks later. At the time that Walker

kept the remainder of the premium, he would not have known that Jones was getting a new car.

       Walker paid an additional $18.04 to Omni on July 11, 2003. Jones paid an additional

$753 on July 25, 2003, but Walker did not send any more money to Omni until September 2,

2003, when he paid $535.80 to Omni. Walker did not remit funds to Omni within 30 days, and

Omni did not authorize him to retain the funds.

       The Director argues that the failure to remit funds resulted in failure to obtain or continue

coverage on behalf of the insured or prospective insured, Edna Jones. This is not exactly true in

the case of Edna Jones. Her coverage remained in effect from June 26, 2003, until she requested

that it be cancelled on December 29, 2003. There is no evidence that it actually lapsed during

this period. Walker received a notice of cancellation stating that the policy would not be

cancelled if Omni received the amount past due by August 31, 2003. Walker did not remit the

premium until September 2, 2003, but there is no evidence that the policy was actually cancelled

due to the untimely payment. On December 23, 2003, Omni issued a cancellation notice,

effective January 4, 2004, stating that the policy would be cancelled due to nonpayment of

premium unless payment was received by January 2, 2004. On December 29, 2003, Jones was

frustrated because she had still not received insurance cards, and she requested that Walker

cancel her policy. Even though Walker‟s behavior was dilatory and not to be commended, the

failure to continue coverage ultimately resulted from Jones‟ request to cancel the policy, not

from Walker‟s failure to remit the premium.

                                                  23
       Walker argues that he kept Jones fully insured and that she eventually received a

“windfall” of $406.31. It is true that Jones was covered until she terminated her insurance (as a

result of frustrations with Walker‟s service) and that she received a refund (after she sued

Walker). The basis for discipline is not whether the score was even in the end. The Director‟s

complaint is based on the fact that Jones failed to comply with the regulation by remitting

premiums to the insurance company within 30 days. The fact that the customer was eventually

made whole does not negate the fact that Walker failed to comply with the regulation.

                                             2. Carter

       Walker collected $1,167 from Carter for six months of coverage and deposited it in his

agency‟s account, but then set up automatic drafted payments of $262 per month without

Carter‟s knowledge, instead of remitting the full amount to Deerbrook. Walker failed to remit

the money to Deerbrook within 30 days. Walker argues that he set up the automatic drafted

payments for Carter as a reminder that he did not want to renew them because Carter‟s husband

had two DWIs. However, this does not excuse Walker‟s failure to remit the money to Deerbrook

within 30 days.

       The Director asserts that Walker‟s failure to remit funds resulted in failure to obtain or

continue coverage on behalf of Carter. Carter‟s coverage was discontinued on March 18, 2004,

because Walker terminated it without her consent, not because the premium was not remitted.

                                            3. Grimes

       Walker collected a total of $595 from Grimes, but never remitted any of it to AIG.

Walker failed to remit a premium, and this resulted in a failure to obtain coverage on behalf of

the prospective insured.




                                                24
                                         4. Antoinette Jones

        Because Omni has no record of coverage for Antoinette Jones, we made an inference and

a finding that Walker failed to remit a premium payment to Omni. The regulation requires that

an insurance producer remit all premium payments “to those persons entitled to them as soon as

is reasonably possible, . . . but in no event later than thirty (30) days after the date of receipt.”

By failing to either remit the premium payment to Omni or refund it to Antoinette Jones within

30 days, Walker violated the regulation.

        However, the evidence is insufficient to show that the failure to remit premium payments

resulted in a failure to obtain or continue coverage for Antoinette Jones. Jones never closed on

the property at 7901 Alert. She did not have enough money to pay the premium for both auto

and homeowners insurance. There is no evidence that Walker heard any more from her, except

that she asked for a refund. The evidence does not show that the failure to obtain coverage was

due to any failure of Walker to remit premiums. Rather, it appears to have been due to Jones‟

failure to pay the full amount of premiums and close on the property at 7901 Alert.

                                            5. Conclusion

        Walker violated 20 CSR 700-1.140(2)(D) in the Edna Jones, Carter, Grimes, and

Antoinette Jones transactions. We find cause to deny Walker‟s application under § 375.141.1(2)

for Walker‟s violation of Regulation 20 CSR 700-1.140(2)(D).

                                     Count II: Misappropriation

        Misappropriation is “[t]he unauthorized, improper, or unlawful use of funds or other

property for [a] purpose other than that for which intended.” Monia v. Melahn, 876 S.W.2d 709,

713 (Mo. App., E.D. 1994).

        The Director asserts that Walker misappropriated, withheld, or converted the following

amounts:

                                                   25
                              $600         Edna Jones premium payment
                              $753         Edna Jones premium payment
                            $1,167         Carter premium payment
                              $275         Grimes premium payment
                              $320         Grimes premium payment
                              $150         Antoinette Jones premium payment
                              $296         Johnson premium payment

Walker collected $600 from Edna Jones, but initially remitted only $290.80 to Omni. Walker

collected an additional $753 from Jones on July 25, 2003, and remitted $535.80 to Omni on

September 2, 2003. By holding money in his account rather than remitting it to Omni, Walker

misappropriated it.

        As to the Carter transaction, Carter‟s coverage remained in effect, and Walker Insurance

eventually paid more than Carter to maintain coverage. Notwithstanding, Walker did not remit

all of the initial premium payment to the insurance company, and Carter was unaware that he set

up automatic drafts from the agency account rather than paying the full premium when she paid

it. This use of the funds was unauthorized and was for other than the intended purpose.10

        In the Grimes transaction, Walker collected a total of $595 and never remitted any of it to

the insurance company. This was an unauthorized use of the funds for a purpose other than that

for which it was intended.

        At the informal conference before the Director, Walker stated that he was not aware that

Antoinette Jones never closed on the property at 7901 Alert and that he never heard anything else

from her. (Ex. 2.5 at 114.) She stated, however, that he refused to give her money back. (Ex.

2.5 at 114.) At the informal conference before the Director, Walker stated that he would check

on the transaction and that he could reverse the transaction. (Ex. 2.5 at 120.) He was to let the

Director know if he took such action (Ex. 2.5 at 121), but there is no evidence in our record of


        10
          The Director does not allege that Walker‟s signature on the $218 refund check was a misappropriation.
Walker Insurance did not even recover the amount that it had paid for Carter‟s insurance coverage.

                                                       26
any further action. By failing to either remit the money to an insurance company or refund it to

Jones, Walker used the money for a purpose other than that intended.

        Walker collected $296 from Johnson on May 31, 2005, but remitted only $177.02 with

the application on June 21, 2005. By failing to remit the money to the insurance company,

Walker used it for a purpose other than that intended.

        We find cause to deny Walker‟s application under § 375.141.1(4) because Walker

misappropriated the premium payments of Edna Jones, Carter, Grimes, Antoinette Jones, and

Johnson.11

                                            Count III: Signatures

        The Director argues that Walker was not authorized to sign the statement of no loss in the

Edna Jones transaction, the refund check in the Carter transaction, and the exclusion form in the

Osborne transaction. At the informal conference before the Director, Walker claimed that one of

his secretaries signed the Edna Jones document. (Ex. 2.5 at 41.) Our finding that Walker signed

it is based on Edna Jones‟ testimony that he admitted to her that he signed it. (Tr. at 120-21.)

Walker admitted that he signed the Osborne document. (Tr. at 182-83; cf Ex. 2.5 at 80.) At the

informal conference before the Director, Walker admitted that he signed Carter‟s refund check.

(Ex. 2.5 at. 68.)

        Walker contends that the broker services contract authorized him to act as attorney in fact

on behalf of his clients. However, there is no evidence that Osborne signed a broker services

contract, as did Edna Jones and Carter. Walker was not authorized to sign for Osborne, under a

broker services contract or otherwise.




        11
          Because we conclude that misappropriation occurred, we do not reach the issue of whether this was also a
conversion or improper withholding of the premium payments.


                                                       27
       The Director argues that Walker‟s broker services agreements are inadequate as powers

of attorney. The pertinent language in the agreement is broad and general:

                   Also as your agent and broker, there are times when I or the
                   agency will need to act as your attorney-in-fact as related to the
                   business of insurance.

This broad and general language is inadequate to form a valid power of attorney. The courts

have formulated principles to determine when a power of attorney is valid and enforceable:

                   Courts generally construe powers of attorney strictly and will not
                   infer broad powers from instruments which do not sufficiently
                   describe the property or subject with which the agent is to deal. As
                   otherwise stated, „The general rule is that the power (of attorney)
                   must be pursued with legal strictness, and the agent can neither go
                   beyond it nor beside it; in other words, the act done must be legally
                   identical with that authorized to be done.‟[12]

                   Well established rules of interpretation of powers of attorney
                   dictate that broad, all-encompassing grants of power to the agent
                   must be discounted. . . . Language in a power of attorney that
                   apparently grants broad power to convey the principal‟s property,
                   such as the power to convey “as sufficiently as (the principal)
                   could do personally,” is deemed to be mere “window dressing” and
                   must be disregarded. Court decisions similarly strictly construe
                   general powers of attorney. . . . Missouri courts also insist on strict
                   construction of powers of attorney and refuse to infer broad powers
                   from instruments that inadequately describe the property with
                   which the agent is to deal. . . . [A] power of attorney must state
                   explicitly its subject matter and purpose.[13]

       In Estate of Casey v. Commissioner of Internal Revenue, 948 F.2d 895, 898-99 (4th Cir.

1991), the court set forth similar principles:

                   First off, we believe that the Virginia Supreme Court might well
                   adopt, as a matter of policy, a flat rule that the unrestricted power
                   to make gifts will not be found in any formally drawn,
                   comprehensive, durable power of attorney that does not expressly
                   grant it. Such a rule--which would make the gifts here revocable
                   ones--would be but a special application of an assumption


       12
            Prior v. Hager, 440 S.W.2d 167, 174 (K.C. Ct. App. 1969) (citations omitted).
       13
            Mercantile Trust Co. v. Harper, 622 S.W.2d 345, 349-50 (Mo. App., E.D. 1981) (citations omitted.)

                                                        28
generally made in the interpretation of such instruments. As
expressed in the Restatement (Second) of Agency:


   Formal instruments which delineate the extent of authority,
   such as powers of attorney …, giving evidence of having been
   carefully drawn by skilled persons, can be assumed to spell out
   the intent of the principal accurately with a high degree of
   particularity. Such instruments are interpreted in light of
   general customs and the relations of the parties, but since such
   instruments are ordinarily very carefully drawn and scrutinized,
   the terms used are given a technical rather than a popular
   meaning, and it is assumed that the document represents the
   entire understanding of the parties.

Id. § 34, comment h.

A sister state in this circuit recently has adopted such a flat rule
applicable to powers of attorney generally. In Fender v. Fender,
285 S.C. 260, 329 S.E.2d 430, 431 (1985), the Supreme Court of
South Carolina, invalidating gifts by a familial attorney-in-fact,
announced that “[i]n order to avoid fraud and abuse, we adopt a
rule barring a gift by an attorney-in-fact to himself or a third party
absent clear intent to the contrary in writing” (emphasis added).

When one considers the manifold opportunities and temptations for
self-dealing that are opened up for persons holding general powers
of attorney--of which outright transfers for less than value to the
attorney-in-fact herself are the most obvious--the justification for
such a flat rule is apparent. And its justification is made even more
apparent when one considers the ease with which such a rule can
be accommodated by principals and their draftsmen. . . . In the
first place, the Virginia Court traditionally has construed powers of
attorney narrowly in the terms of their conferral. As this court has
noted, that court “strictly limits the authority of an agent to the
letter of his instructions.” Eitel v. Schmidlapp, 459 F.2d 609, 613
(4th Cir.1972) (citing Virginia cases).

Limiting authority to the letter of an instructing document is, of
course, most easily and confidently done by courts where the
instrument is a formal and comprehensive one, with carefully
enumerated specific powers. In such cases, as the quoted
Restatement of Agency comment indicates, courts may indulge the
ongoing assumption that the document “represents the entire
understanding of the parties,” and specifically that the failure to
enumerate a specific power, particularly one with the dangerous
implications of a power to make unrestricted gifts of the principal‟s

                                  29
               assets, reflects deliberate intention. The power of attorney in issue
               here is of this type: formally drawn, comprehensive in its
               enumeration of specific powers, but with no gift-power expressly
               conferred. To adopt for such instruments a flat rule that gift power
               will not be found unless expressly conferred would be but a special
               application of Virginia‟s general approach of holding agents to the
               “letter of their instructions.” See, e.g., Southern Ry. v. Thomas,
               182 Va. 788, 30 S.E.2d 575 (1944) (holding to territorial limits).

       The agreement at issue in this case is not artfully and carefully drawn. It does not even

purport to be a power of attorney form, but states that “there are times when I or the agency will

need to act as your attorney-in-fact.” We do not believe that this was intended by Walker‟s

clients to confer powers such as endorsing refund checks and depositing them in his account.

Even if Carter‟s account with Walker was underpaid, we do not agree that he was authorized to

endorse a check and deposit the money in his account.

       Walker purported to write Osborne‟s signature on an exclusion endorsement listing

Randy Osborne, spouse, as a person excluded from her automobile insurance policy. However,

there was no one in her household named Randy Osborne. Similarly, Edna Jones was unaware

that Walker purported to sign a statement of no loss for her. Edna Jones, Carter, and Osborne

did not intend for the broker services contract to be a grant of power of attorney to Walker.

Further, Walker did not sign his own name to these documents and designate that he was acting

as attorney in fact. Instead, he signed the name of each of these clients. We agree that the

purported signatures on documents pertaining to these individuals were not authorized.

       The Director also argues that the broker services contract fails to comply with the

requirements of § 375.116 and Regulation 20 CSR 700-1.100. Section 375.116 provides that no

insurance broker shall receive any compensation, other than commissions deductible from

premiums, unless the right to compensation is based upon a written agreement between the

broker and the insured. Regulation 20 CSR 700-1.100 sets forth a standard form for a producer


                                                30
services agreement. The Director‟s answer does not allege a failure to comply with these

provisions and therefore does not give notice of those bases. We find that Walker was not

authorized to sign for Edna Jones or Carter. This decision is not based on a failure to comply

with the statute or regulation, but on our conclusion that the broker services agreement is

inadequate to confer a power of attorney upon Walker. There is cause to deny Walker‟s

application under § 375.141.1(10) because Walker signed the name of another to a document

related to an insurance transaction without authorization.

                          Count IV: Practices and Conduct of Business

       The Director argues that Walker‟s application may be denied under § 375.141.1(8)

because Walker used fraudulent, coercive or dishonest practices, or demonstrated incompetence,

untrustworthiness or financial irresponsibility.

       Fraud is an intentional perversion of truth to induce another to act in reliance upon it.

Hernandez v. State Bd. of Regis’n for Healing Arts, 936 S.W.2d 894, 899 n.2 (Mo. App., W.D.

1997). It always includes dishonesty, which is a lack of integrity, a disposition to defraud or

deceive. MERRIAM-WEBSTER'S COLLEGIATE DICTIONARY 359 (11th ed. 2004). To coerce is to

restrain or dominate by force. Id. at 240. A practice is something done customarily. Id. at 974.

Walker used fraudulent and dishonest practices by signing customers‟ names to documents

without authorization, and used dishonest practices by failing to remit monies to insurance

companies.

       Incompetency is a general lack of professional ability, or a lack of disposition to use an

otherwise sufficient professional ability, to perform in an occupation. Johnson v. Missouri Bd.

of Nursing Adm’rs, 130 S.W.3d 619, 642 (Mo. App., W.D. 2004). The definition of

“trustworthy” is “worthy of confidence” or “dependable.” WEBSTER'S THIRD NEW

INTERNATIONAL DICTIONARY 2457 (unabr. 1986). Irresponsible means “not based on sound

                                                   31
reasoned considerations . . . unprepared or unwilling to meet financial responsibilities.” Id. at

1196. Walker demonstrated incompetency, untrustworthiness, and financial irresponsibility by

collecting premiums and failing to remit them to insurance companies or return the money to

customers, failing to secure insurance coverage for some customers, and signing customers‟

names on insurance documents without authorization. Therefore, we have cause to deny

Walker‟s application under § 375.141.1(8).

                                             Discretion

       We have found that we have grounds to deny Walker‟s application under § 375.141.1(2),

(4), (8), and (10). Section 375.141.1 provides that we “may” deny the application on these

grounds. “May” means an option, not a mandate. S.J.V. ex rel. Blank v. Voshage, 860 S.W.2d

802, 804 (Mo. App., E.D. 1993). The appeal vests in this Commission the same degree of

discretion as the Director, and we need not exercise it the same way. Finch, 514 S.W.2d at 614.

       Walker presented evidence that he helped low-income individuals to obtain insurance.

These customers were high-risk and usually could not obtain coverage with conventional

insurance companies. However, this does not excuse his failure to follow statutes, regulations,

and proper business practices. Walker also argues that customers such as Edna Jones and Carter

were fully insured and that he lost money on the Carter transaction. However, Walker

terminated Carter‟s coverage without her consent, and he failed to secure coverage for Grimes

and Beckham. Walker consistently issued invalid insurance ID cards and consistently failed to

remit premiums to the insurance companies. He also signed customers‟ names to insurance

documents without authorization. The primary purpose of professional licensing is to protect the

public. Lane v. State Comm. of Psychologists, 954 S.W.2d 23, 25 (Mo. App., E.D. 1997).

“[T]he license granted places the seal of the state‟s approval upon the licen[see.]” State ex rel.

Lentine v. State Bd. of Health, 65 S.W.2d 943, 950 (Mo. 1933). The public must be protected

                                                 32
against an insurance producer who takes their money, misappropriates it, and fails to obtain

insurance coverage for them.

                                           Summary

       We deny Walker‟s application to renew his insurance producer license.

       SO ORDERED on December 20, 2006.



                                                ________________________________
                                                TERRY M. JARRETT
                                                Commissioner




                                               33

				
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